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New Jersey Removes Legal Impediment To Direct Tesla Sales

Posted by timothy on from the beating-back-mob-rule dept.

As reported by The Verge, the rule-makers of New Jersey have relented, and will now allow a slightly freer market for cars. Almost exactly one year after it was banned from selling its cars directly in New Jersey, Tesla will be back in business in the Garden State. Governor Chris Christie signed into law a bill this afternoon that reversed last year's ban. The new legislation comes with some limits. Tesla can only open a total of four direct sale dealerships and has to operate at least one service center. But it's a major win following a heated war of words that saw Tesla CEO Elon Musk compare local dealers to a mafia protection racket subverting the democratic process.

15 of 85 comments (clear)

  1. Just 4? by jlv · · Score: 4, Insightful

    Because if they opened more than four, that would be just... what?

    1. Re:Just 4? by Anonymous Coward · · Score: 5, Funny

      Because if they opened more than four, that would be just... what?

      5

    2. Re:Just 4? by Trailer+Trash · · Score: 4, Insightful

      I lived 35 years in Jersey and my family is still mostly there. I had a few years when all I did was drive from one dealership to another doing auto insurance claims. The place is full of car dealerships. They tend to be in clusters along old highways, though sometimes embedded in urban neighborhoods too. The last thing Jersey needs is more car dealerships and lots. So I can see the numerical limits as having some merit. It's a crowded place, and more lots competing for the same number of buyers is not really an improvement, however much Elon Musk doesn't want to use existing dealer networks. Or how much people want Tesla electric vehicles out on the road.

      Yeah, if only there were a way for everybody together to decide how many auto dealerships are needed. We could call it a "market".

      But, yeah, silly stuff. We should centrally plan how many dealerships there should be. It'll work out much better.

      --
      Do you have ESP?
    3. Re:Just 4? by Mal-2 · · Score: 5, Funny

      Because if they opened more than four, that would be just... what?

      5

      Which would be right out.

      --
      How is the Riemann zeta function like Trump rallies? Both have an endless number of trivial zeros.
    4. Re:Just 4? by Anubis+IV · · Score: 4, Informative

      Have you ever heard of the concept of zoning? Think of this as zoning on a statewide level.

      Oh, come on. This bears no resemblance to zoning at all. Zoning establishes areas by use (e.g. commercial, residential, industrial...we've all played SimCity), not by company name on the sign out front. If you want to call it zoning at a state level (presumably to limit the number of dealership lots in the state, as you said in your earlier post), then where are the restrictions on those uses for the rest of the industry? And if this really is zoning, then what's to stop them from simply buying out an existing dealership that is already "zoned" appropriately so that they can increase their count from 4 to 5 in the state?

      Oh, yeah, there's a law that's shackling just them and no one else so that they're prevented them from doing exactly that.

      Call a spade a spade: it's a caveat tossed in to appease the other side by establishing an unjust restriction on one company's ability to compete in the market. Don't try to pass this off as being something that even remotely resembles zoning.

    5. Re:Just 4? by Gription · · Score: 5, Funny

      But seeing that we are talking about Jersey I suspect that it will be illegal to plug in your own electric car just like you can't fill your own gas tank...

      Uhhh ...
      So is a Tesla designed with a 40 mile reserve so you can get to a dealer so they can charge it?

    6. Re:Just 4? by disambiguated · · Score: 3, Interesting

      The last thing Jersey needs is more car dealerships and lots. So I can see the numerical limits as having some merit.

      Have you ever been to a Tesla dealership? They are nothing like typical dealerships. They don't have sprawling lots full of cars. They are small, typically in pedestrian friendly areas nowhere near other dealerships, and have just enough cars that you can look at the models and options, with a few more cars for test drives. They're more like a retail store than a dealership lot. Here is a blog with pictures of dealerships around the world.

      Each car is built to order, and you come pick it up at the dealership or they deliver it to you. I suspect the limit is a compromise with opponents of Tesla's model, not anything to do with too many dealerships.

    7. Re:Just 4? by Anubis+IV · · Score: 4, Informative

      Um... the law says "Tesla" at what part of the text?

      The part where it says "like Tesla Motors" in the actual text of the law. It both mentions Tesla explicitly as an example of who this law applies to...

      This bill provides that ZEVs may be directly sold by certain manufacturers, like Tesla Motors [...]

      ...as well as implicitly refers to Tesla in that the bill is tailored such that it will only ever apply to Tesla. Namely, the bill only applies to manufacturers of Zero Emission Vehicles (ZEVs) engaging in direct sales who were licensed by the New Jersey Motor Vehicle Commission on or before the start of last year. The only company on that list or that will ever be on that list is Tesla.

      Just because they do things differently now, what if there are suddenly "Tesla2", "Tesla3", and so on?

      There can't be. See the provision above about the date. Even if a "Tesla 2" manufacturer came along and managed to get licensed by the New Jersey Motor Vehicle Commission (which they can't be, since I believe the part of last year's law that prohibits them is still on the books), they wouldn't have done it before the start of 2014, meaning they wouldn't be eligible for this exemption.

  2. Re:Sad to see the Republicans always... by AaronW · · Score: 4, Informative

    Except now the problem isn't the small dealerships. It's the huge dealership conglomerates that are worth billions. The laws were created in order to prevent the likes of GM from competing directly with third-party dealerships. In the case of Tesla, there are no third-party dealerships with which to compete.

    Also, with the Tesla model dealerships don't really work. Every car Tesla sells is made to order. There is no inventory sitting around at dealerships. The customer orders exactly what they want and it's made to order. This is very different than a traditional dealership where the dealer buys an inventory of cars then turns around to sell it to the customer.

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    This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
  3. Re:Sad to see the Republicans always... by Anonymous Coward · · Score: 3, Insightful

    What Tesla driver isn't going to want to show off their car?

    Yes, what Tesla driver doesn't want a bunch of strangers driving their car and possibly robbing/assaulting/killing them?

  4. Re:Sad to see the Republicans always... by Anubis+IV · · Score: 4, Informative

    A) Democrats have near-supermajorities in both the Senate and General Assembly of New Jersey (60% in both). Chris Christie may be a Republican, but he can still only sign the laws that are put in front of him. Regardless, that really doesn't matter, since the same politicians who established this law last year are undoing their own work now. Partisanship shouldn't be entering this discussion.

    B) I'd love a link to the history of car franchising in America. I have yet to see one and would love to know what the history was or why those protections were established in the first place. Because, based on what I understand so far, they seem to be ancient, anti-competitive laws established by states in response to a perceived crisis that ended decades ago and which are now being used by the formerly-underdog players to abuse their now-dominant positions.

    But maybe I have it wrong. Either way, I'd love any links you might have on the subject.

  5. Re:Sad to see the Republicans always... by Anonymous Coward · · Score: 3, Funny

    You're not thinking this through. Obviously his dealership-owning father told him that if this bill gets signed he's going to have to move out of the basement.

  6. Re:Jesus! by ckatko · · Score: 5, Funny

    I'm a pollution-denier. I don't think smog exists because the science hasn't all come out yet.

  7. Re:Sad to see the Republicans always... by dannydawg5 · · Score: 4, Informative

    Planet Money did a good podcast episode on why buying a car is so horrible:

    http://www.npr.org/blogs/money...

  8. Re:Jesus! by Zobeid · · Score: 4, Insightful

    Why does this lie keep getting repeated and repeated and repeated and repeated. . . It's been going on for YEARS now. It gets frustrating after a while, especially since anybody could spend a couple of minutes with Google and find out the facts.

    I think most normal people without an axe to grind understand that there are other sources of electrical power besides coal, and that we do have nuclear plants, and we do have hydro plants, and we do have natural gas, and we do have wind farms, and we even have a small (but rapidly growing) amount of solar. Some of them may even known that the percentage of power from coal in the US has been dropping for years and is well under half now. So, when you talk about a highly polluting coal-powered electric car, you're only making yourself look dumb in front of everyone.